Because Of The Omicron Variant, IMF Delivers Bad News: Global Economic Growth Projection Lowered

First Deputy Managing Director of the International Monetary Fund (IMF) Geoffrey Okamoto. (Photo: Doc. Antara)

JAKARTA - First Deputy Managing Director of the International Monetary Fund (IMF) Geoffrey Okamoto stated that the projected global economic growth of 4.9 percent in 2022 will still have the potential to decline due to the new variant of Omicron's COVID-19.

"We project global growth to be 5.9 percent in 2021 and decline to 4.9 percent next year. I think it's important to emphasize that there are still downside risks," he said at the IMF's Joint Media Briefing in Nusa Dua, Bali, quoted from Antara, Friday 10 December.

In October 2021, the IMF released a projection of global economic growth in 2021 of 5.9 percent, 0.1 percent lower than the forecast announced in July.

Okamoto said the decline in the 2021 projection was in line with the decline in gross domestic product (GDP) in the third quarter of 2021 due to the spread of positive cases of the Delta variant around the world.

On the other hand, he said that the existence of a new variant of Omicron as well as supply chain disruptions again suppressed economic activity, which began to recover in the fourth quarter of 2021, thus having implications for the economy next year.

According to him, this crisis will have a prolonged or lasting scarring effect on the economy and vulnerable groups considering the Omicron variant creates uncertainty that COVID-19 will become more aggressive.

Moreover, he said the crisis would deepen as inflationary pressures could lead to faster-than-expected tightening of monetary policy in developed countries.

Inflationary pressures and tightening monetary policy will tighten global financial conditions with some potential spillovers in emerging markets and developing countries.

Therefore, Okamoto emphasized that the Indonesian G20 Presidency is one of the steps to find a strategy to remove the global from the impact of the COVID-19 pandemic crisis.

G20 members can have good discussions through the Indonesian Presidency to find solutions starting with addressing the global health and economic crisis so as to create a strong recovery.

"We want prosperity and growth in countries around the world that have been depressed by prosperity and growth," he said.